News
USA | Jul 5, 2022

Oil from U.S. reserves head overseas as gasoline prices stay high

/ Our Today

administrator
Crude oil storage tanks are seen at the Kinder Morgan terminal in Sherwood Park, near Edmonton, Alberta, Canada November 14, 2016. (Photo: Chris Helgren/REUTERS))

(REUTERS)

More than 5 million barrels of oil that were part of a historic U.S. emergency oil reserves release aimed at lowering domestic fuel prices were exported to Europe and Asia last month, according to data and sources, even as U.S. gasoline and diesel prices touched record highs.

The export of crude and fuel is blunting the impact of the moves by U.S. President Joe Biden designed to lower record pump prices. Biden on Saturday (July 2) renewed a call for gasoline suppliers to cut their prices, drawing criticism from Amazon founder Jeff Bezos.

About 1 million barrels per day are being released from the Strategic Petroleum Reserve (SPR) through to October. The flow is draining the SPR, which last month fell to the lowest since 1986. U.S. crude futures are above US$105 per barrel and gasoline and diesel prices above US$5 a gallon in one-fifth of the nation.  U.S. officials have said oil prices could be higher if the SPR had not been tapped.

The Bryan Mound Strategic Petroleum Reserve, an oil storage facility, is seen in this aerial photograph over Freeport, Texas, U.S., April 27, 2020. (Photo: Adrees Latif/REUTERS)

The fourth-largest U.S. oil refiner, Phillips 66, shipped about 470,000 barrels of sour crude from the Big Hill SPR storage site in Texas to Trieste, Italy, according to U.S. Customs data. Trieste is home to a pipeline that sends oil to refineries in central Europe.

Atlantic Trading & Marketing (ATMI), an arm of French oil major TotalEnergies, exported 2 cargoes of 560,000 barrels each, the data showed.

Phillips 66 declined to comment on trading activity. ATMI did not respond to a request for comment.

Cargoes of SPR crude were also headed to the Netherlands and to a Reliance refinery in India, an industry source said. A third cargo headed to China, another source said.

Storage tanks are seen at Marathon Petroleum’s Los Angeles Refinery, which processes domestic & imported crude oil into California Air Resources Board (CARB), gasoline, diesel fuel, and other petroleum products, in Carson, California, U.S., March 11, 2022. Picture taken with a drone. (Photo: Bing Guan/REUTERS)

At least one cargo of crude from the West Hackberry SPR site in Louisiana was set to be exported in July, a shipping source added.

“Crude and fuel prices would likely be higher if (the SPR releases) hadn’t happened, but at the same time, it isn’t really having the effect that was assumed,” said Matt Smith, lead oil analyst at Kpler.

The latest exports follow three vessels that carried SPR crude to Europe in April helping replace Russian crude supplies.

U.S. crude inventories are the lowest since 2004 as refineries run near peak levels. Refineries in the U.S. Gulf coast were at 97.9 per cent utilisation, the most in three and a half years.

Comments

What To Read Next